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Germany's benchmark 10-year bond yield has made its biggest weekly jump since December 2015. Borrowing costs across the eurozone and beyond also rose as investors prepare for an end to the period of easy monetary policy.

In Germany, 10-year Bund (sovereign) yields fell 1.5 basis points to 0.44 percent, on Friday, but remain 19 basis points up over the week and saw their biggest weekly jump since December 2015.

Market fears of tighter monetary policy also weakened the dollar and pushed yields on 10-year US Treasuries up 14 basis points in the past week to 2.28 percent - near a one-month high.

The 10-year bond yields in France and the UK have risen at least 20 basis points over the past week. Italian yields were set for their biggest weekly jump since March, increasing the borrowing costs of the highly indebted eurozone country.

The main driver of the bond sell-off was comments by ECB chief Mario Draghi (main photo) earlier this week that the eurozone was headed towards "reflation,” interpreted to mean that Draghi was planning to taper his €60bn-per-month bond-buying program.

Ending Quantantive Easing?

The ECB, Bank of Japan and the US Federal Reserve bought large amounts of bonds to shore up their economies after the financial crisis, driving down bond yields to extreme lows, which is known as Quantantive Easing.

The Fed stopped buying bonds in 2014 and has raised short-term rates. Dragi's recent remarks suggest more central banks might be following suit.

Money markets price in around an 80 percent chance that the ECB will hike rates over the next year, up from 20 percent earlier this month, the Financial Times reported.

Federal Reserve Board Chairwoman Janet Yellen.

Yield rises across the board

Momentum for monetary tightening by the ECB is gathering pace, with the European Commission's economic sentiment indicator hitting its highest levels since August 2007, possibly a signal that May's weak inflation could be a blip.

Inflation - which is targeted by the European Central Bank (ECB) at 2 percent - fell to 1.3 percent in June from 1.4 percent a month earlier, bringing some comfort to bond markets and allowing yields to fall away from their earlier highs.

"It certainty feels like a sentiment change out there. The trigger may have been Draghi's comments, but the fact is that even after clarification yields have continued to rise and that suggests there is more at play," Nordea chief strategist Jan von Gerich told the news agency Reuters.

"People are starting to come to the view that tapering will happen soon and they have to position for that."

Don't believe the hype

Bloomberg news agency suggested on Friday that nothing fundamental has happened on the economic data front or politically.

"We've just been talked at by central bankers getting in their 'we warned you' excuses on overpriced assets… [but] clouds hanging over the economic and inflation outlook mean there's no realistic prospect of a change in monetary policy."